Italian Prime Minister Giorgia Meloni’s party, the Brothers of Italy, is proposing new measures to incentivize listed companies to stay in Italy by allowing them to issue shares that grant key investors up to 10 voting rights each. This comes as a response to the increasing number of Italian companies adopting Dutch governance rules and even relocating their headquarters to the Netherlands to protect the control of leading shareholders.
In addition to the voting rights proposal, Meloni’s party is also suggesting giving investors more influence over the selection of nominees for a company’s board renewal. While this system is common in other countries, Italy has only recently implemented it in a few major companies such as Generali, UniCredit, and Mediobanca.
In April, the government introduced a bill to encourage listings by allowing companies to issue shares with up to 10 voting rights. However, this option was limited to the pre-listing stage. Currently, existing listed companies can only utilize a “loyalty share scheme,” which doubles the voting rights of shares for investors who hold them for at least 24 months.
The latest proposal suggests that shares could grant up to 10 votes after 12-month intervals following the initial 24 months. Additionally, lawmakers are planning to increase shareholder scrutiny over the candidates proposed by the outgoing board in listed firms. Each member of the list would be subject to an individual vote by shareholders to secure a seat once the board’s overall list receives sufficient votes.
The push for these reforms is influenced, in part, by businessman Francesco Gaetano Caltagirone’s criticism of the power that investors abroad hold in selecting individual board members. Caltagirone specifically pointed out the influence of Mediobanca on Generali, even after the insurer implemented the list system for board elections. Generali, however, maintains that its board is independent from any investors.
These proposals aim to increase the appeal of the Milan Stock Exchange and prevent further relocations of corporate headquarters from Italy. The measures will provide more voting rights for key investors and give shareholders greater control over the selection of board members, ensuring companies remain domiciled and rooted in Italy.
(Editing by Keith Weir)
Credit: The Star : News Feed
